China Coal-to-Chems Challenges

By John Richardson

CHINA’s coal reserves will last only another 38 years at their present rate of extraction, according to Kai Pflug, CEO of Shanghai-based consultancy, Management Consulting – Chemicals, in this article from ICIS Chemical Business.

This suggests that the current enthusiasm for coal-based chemicals, as coal supplies become constrained, might wane among China’s policymakers.

He also suggests that many of the numerous coal-to-chemicals projects being planned in China, including Sinopec’s first foray into the sector, may not go ahead because of technology issues.

But for the time being at least, his scepticism isn’t denting enthusiasm for investment in the sector. This includes not only the now more conventional coal-to-methanol-to-olefins process, but also the coal-to-monoethylene glycol (MEG) process – via dimethyl oxalate produced from syngas. One coal-to-MEG project is already on-stream in China, with a second due to start-up in the second half of 2012.

Interestingly, also, PetroChina claims to have developed a technology to make paraxylene (PX) via coal, with plans to commission a 600,000 tonne/year plant somewhere in east China in 2016.

From an overseas importer’s perspective, this is very probably of only minor relevance over the long term. What matters more is assessing China’s appetite for raising petrochemicals self-sufficiency. If the commitment is there, targets will be met – whether it is mainly via coal, oil, or perhaps eventually even via shale gas-derived feedstock.

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